California Court of Appeal Determines Employer Had Reason to Know Applicant's Criminal Conviction Was an Impermissible Employment Consideration, Ordering New Trial

Six years following the initially filed complaint, the California Court of Appeal reversed the superior court's decision in favor of the California car dealer, remanding the case back to the superior court for a new trial.

In 2010, plaintiff Tracey Molina pleaded no contest to misdemeanor grand theft. Following restitution payments, community service, and three years of probation, Molina filed a motion under Penal Code section 1203.4 to have her conviction dismissed. The motion was granted and her conviction was dismissed in November 2013.

In 2014, Molina was hired by Premier Automotive Imports of CA, LLC. Molina did not disclose the dismissed conviction on her application as permitted under the Labor Code section 432.7. Labor Code section 432.7 prohibits an employer from requiring an applicant to disclose any conviction that has been judicially dismissed and further restricts the employer from considering such record as a factor in the termination of employment. Four weeks after starting the job, the Department of Motor Vehicles (DMV) mistakenly reported Molina's dismissed conviction as an active criminal conviction.

In lieu of investigating the discrepancy, Premier fired Molina for supplying false information on the application despite Molina's explanation regarding the dismissed conviction. Three weeks later, the DMV issued a corrected notice; however, Molina was not rehired. She responded by filing a retaliation complaint with the Labor Commissioner in April 2014.

In December 2016, the Labor Commissioner ruled in Molina's favor, ordering Premier to pay back wages, a civil penalty and reinstate Molina to her former (or similar) position. Premier was unsuccessful in appealing the decision and refused to comply with the terms of the Commissioner's ruling. In March 2018, the Commissioner filed an enforcement action, alleging that Premier unlawfully retaliated against Molina for exercising her rights under the Labor code section 432.7.

The matter proceeded to a jury trial. The trial court found in favor of Premier in February 2019, arguing that there was no concrete evidence allowing a jury to determine that Premier was aware that the conviction had been dismissed when terminating Molina. Molina appealed to the California Court of Appeal where the judgement was reversed.

The California Court of Appeal determined that Premier had reason to be aware that the conviction was dismissed because of the discrepancy between Molina's initial background check and the DMV letter. Rather than investigating the discrepancy, Premier terminated Molina, despite Molina notifying Premier about the error and resolving the matter with the DMV. The case has been remanded back to the superior court for a new trial.

It is suggested that employers perform sufficient due diligence regarding criminal records that are revealed post-offer/post-employment. Decisions on whether to retain or dismiss the individual should be arrived at after careful review of all the facts and information.

Posted: October 26, 2020

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This document and/or presentation is provided as a service to our customers. Its contents are designed solely for informational purposes, and should not be inferred or understood as legal advice or binding case law, nor shared with any third parties. Persons in need of legal assistance should seek the advice of competent legal counsel. Although care has been taken in preparation of these materials, we cannot guarantee the accuracy, currency or completeness of the information contained within it. Anyone using this information does so at his or her own risk.

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